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The Impact of Australia’s income tax system on company ownership structure

Published on 01 Jan 20 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

This study examines the links between investor residency, tax status and the corporate ownership structure of Australian listed companies. We find that there is a preference by resident individuals, corporate companies and superannuation funds to hold a  ignificantly higher proportion of shares in companies that pay fully franked dividends, relative to other companies. Furthermore, our results show that non-resident investors, in general, hold a significantly higher proportion of shares in companies that pay either unfranked or partially franked dividends, relative to other companies. Finally, there is some evidence that resident individual investors hold a significantly higher proportion of shares in capital appreciating, as opposed to dividend paying, companies, which is consistent with resident individuals seeking to utilise the tax concessions they are afforded on long-term capital gains.

Author profiles

Dean HANLON
Dean is a Lecturer in the Department of Accounting and Finance, Monash University.
Current at 1 September 2013
Click here to expand/collapse more articles by Dean HANLON.
Sean Pinder
Sean works at the Department of Finance, The University of Melbourne.
Current 1 January 2020

 

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